Australia’s refugee problem has attracted global attention. This from the New York Times.
Companies must justify their ETS whingeing
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The disparity between the public hostility of resource companies to the Government’s emissions trading scheme and what they are telling investors has been highlighted by a request to the ACCC by the Australian Conservation Foundation and the Australian Climate Justice Program, a campaign by lawyers to use legal means to pursue climate change action. As the AFR reported this morning, the groups have asked the ACCC to investigate their claim of misleading conduct by resource companies who have publicly made apocalyptic claims about the impact of emissions trading, but either downplayed the impact to investors or failed to make any disclosure. The companies are Boral, Bluescope Steel, Caltex, Rio Tinto, Woodside and Xstrata. This is no half-baked campaign by wild-eyed greenies. The ACJP first wrote to more than 200 Australian companies in 2003 warning them of the risks of climate change and the need to assess and respond to those risks appropriately. The enormous supporting documentation for the ACCC referral has chapter and verse for every claim made by the resource companies studied, and whether they matched disclosures to investors. The study contrasts alumina giant Alcoa of Australia’s repeated advice to investors via annual reports, ASX advices and prospecta about the uncertainty arising from the impact of the ETS and its specific concerns about each iteration of the Government’s ETS, with the failure of other companies to do the same. For example, Bluescope Steel told the media and a Senate Inquiry in April that “tens of millions of dollars would be wiped from the company’s books in the first years”, which would be “disastrous” for the company, but made no disclosure to investors of any kind. CEO Noel Cornish also said the Port Kembla Steelworks would be threatened, with a similar lack of advice to investors. Boral claimed in a submission to the Government that modelling by a subsidiary showed that the impact of the Green Paper version of the ETS “could be profound” due to “the decline of financial returns to an unacceptable level.” However, Boral’s only advice to investors was from CEO Rod Pearse in June last year when he told investors and analysts “we have been undertaking scenario planning to understand potential financial impacts … and we are well prepared for such changes.” Caltex told a Senate committee that while it could pass on the cost of carbon permits to motorists, there was a “risk of under-recovery of costs” which “could be significant relative to Caltex’s profitability”, but told analysts and its AGM in February that “the additional cost imposed on these emissions under CPRS will be incorporated into the price of the fuel and therefore passed on to consumers.” Rio Tinto produced a range of figures about the impact of the ETS, from $130m in the first year to $430m, $1b or $1.5b over the first decade of the scheme, and warned it would close half its open-cut coal mines by 2020. The single disclosure by the company has been a comment in its annual report that “Rio Tinto’s costs could increase and its results materially affected.” Woodside, one of the loudest whingers in the entire debate, was one of the worst offenders. Its Green Paper submission warned that it would scale back its LNG projects; Don Voelte told the media he would move the Sunrise project to East Timor, and that the ETS would double the company’s operating costs. Woodside made no disclosure to investors of any kind except to note in its profit announcement that “it remains too early to determine the impact of the proposed CPRS on current and future projects”, which entirely contradicted Voelte’s threats. Xstrata also threatened to axe 1000 jobs if the ETS went ahead and close four coal mines, but said nothing to investors. Independent research suggests the truth is much closer to the companies’ advice to investors, or lack thereof, than to their hysterical public comments. A research report by Goldman Sachs JBWere in early May suggested the financial materiality of the CPRS (and “materiality” is the requirement for ASX disclosures) is likely to be insignificant for ASX100 companies, with five of the six companies referred to the ACCC facing carbon costs as a proportion of EBIT of 5% (Boral), 11% (Bluescope), 2% (Caltex), 4% (Rio) and 3% (Woodside). Except, those figures are BEFORE you factor in the free permits to be handed out to EITEs. Most of those companies therefore face costs of 5.5% of those numbers, which is a negligible amount even for Boral. Given the non-materiality of the impact of the ETS, clearly the companies have not breached ASX or Corporations Law requirements, but the ACJP and the ACF have suggested the ACCC try to ping them for “misleading and deceptive conduct”, which relies on taking lobbying and PR as forming part of the companies’ normal trade and commerce. The day-to-day reality is that that is indeed the case, but whether the law stretches that far remains to be seen. Either way, the hypocrisy — or, more accurately, blatant dishonesty — of some of our biggest polluters is on the public record. They have been damned by their own words, or the lack of them. |
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10 Comments
So these big companies lied? Well, well?Isn’t that a surprise? They’ve had at least 10 years to prepare for the need to prevent/reduce harmful emissions, and they’ve done nought. I’d tell them to shut up and get on with it! NOW! Do they want the orinary tax payers to prop up their obscene profits while they carry on poisoning the planet with their filth? They whine and whinge and then their profits are reported, and I scream! Enough!
They’ve been getting subsidies, cheap water and electricity etc for years, while those who are doing it tough can’t afford a heater, and others have increased costs to look forward to. As a pensioner, I don’t mind paying my way(within reason), or contributing to alternate energy sources, but I get bloody furious about propping up the huge profits of companies like these, the banks, and the like, while they go about business as usual - stuffing up the planet for my grand kids? I’m sick of their pollution, I’m sick of their whining, and I’m sick of the clout they have with the Rudd Govt, State & Territory govts, the Opposition and the broader media!
LIZ good on you. Many people are as fed up as you, myself included. It’s time for some political guts and a simple realisation that jobs will not fall from the sky if we push ahead with these changes, as we must! All I can say is selfish, selfish. Can’t the government see that the wider public supports tough measures on this? That they were indeed elected on such a green platform? All I can say is that they are singing to a different tune even to this, and I wonder what that might be…?
Good analysis BK. This was discussed in the AFR last week, but without much detail, and it’s good to have the blanks filled in.
I do find it incredible that there is legislation governing what companies have to tell their shareholders; essentially that it be truthful and reasonable, yet no such legislation exists on information supplied to the Government. They can (and obviously do) just feed any old BS to their minister, knowing their is no way the can be held accountable. What a crock. Virtually treason in my book, which is pretty open minded in general. Further indication of the power of the dollar over the worth of the people.
assholes!
the answer…………nationalise
Gotta love s.52 of the Trade Practices Act - and the state equivalents - outlawing misleading and deceptive conduct by corporations in the course of business.
It really is a wide ranging and good principle of law and morality.
Here is yet another novel and political sphere:
When Keating was frothing about $20B or something in lost revenue from failure to proceed with a firesale of NSW energy assets I duly reported him to the ACCC via their website under this same section - on the basis he was connected to a financial consultancy of some kind in favour of the sell off and yet contrary to his SMH article confused valuations of the 1997 proposal compared to 2008 were for widely divergent assets, in other words apples and oranges. Misleading and deceptive conduct.
Nor was t his my original insight, rather John Kay MP (Greens, NSW).
The ACCC web dude called me up for further detail too. That’ll do Pig!
Another potential example - I reported Coca Cola to the ACCC for potentially claiming water from their site at Peats Ridge as Spring Water, yet it never leaves the ground, and in fact is sourced from a bore tens of metres below the ground. Or as any farmer might describe it as ‘bore water’ not spring water. Get your sparkling fresh bore water. Doesn’t have the same ring about it really. Then we clipped their wings in the NSW land & Env Court (Party name Kettle consultant to Coke). Various flying legal documents to their mail room at Circular Quay with the free drinks fridge in the foyer. This foray didn’t go far, but ironically the ACCC really hooked into Coke a few months later, earlier 2009, even by implication a 60 Minutes rebuff of the bottled water scam.
Ever since I’ve wondered if the the Peats Ridge mob pushed Coke to overcompensate with their ‘Myths’ PR advert campaign, and our brazen complaint on product description gave the ACCC a taste for some action on their own part. Far beyond anything we could have hoped. Thankyou Mr Samuel!
I would suggest that the biggest ETS lies are that:
(1) anthropogenic carbon dioxide is a primary determinant of global temperature at current and higher concentrations;
(2) that mankind can directly make significant changes to global temperatures by playing with carbon dioxide, and
(3) that ‘carbon’ is pollution
Hehehe, thanks Stuart. I love it when the sceptics try and take control of the scientific debate. It’s funny because they don’t have a clue.
I was going to bother arguing the science with you, but at this, very, very late stage, anyone who doesn’t ‘believe’ the science, is either intentionally ignorant or genetically incapable of general understanding. Huge chunks of the civilised world, who are smarter, more qualified and much, much more powerful than you, have realised that we’re stuffing the climate royally, and that the best way to fix it is by limiting pollution. Note that I didn’t say ‘carbon’, but that any of the gases, synthetic or otherwise, that anthropogenic effects put into the atmosphere that contain covalent bonds have a pretty solid warming potential. If you don’t know what a covalent bond is, then you’re way out of your depth and should probably stay inside for a few days. Do some more reading, have a cup of tea and a lie down, and get prepared for a change to the status quo that you know and love. Things ARE going to change, whether you like it or not.
Hi Evan,
Just the reaction I would expect from one of your ilk - name calling and no science. By the way, I do know about covalency - have BSc(Hons) for starters. So why is carbon demonised? In my experience, anyone whom uses the word ‘sceptic’ as a derogatory label in the context of climate is ignoring something.
Well then Stuart, if you do have a BSc(hons) you should know that the science isn’t really for us to discuss. Have you dony any experiments? Do you have the raw data? Have you written any papers that have been reviewd by your peers? It is, in my opinion, the great myth propogated by democracy that anyone can have an opinion on anything. I frankly know bugger all about the ins and outs of climate science, and suspect it is a hell of a lot more complex than what I can contribute to, nor can I resolve the science from the comfort of my living room. I would ask you a similar question to the rhetoric about why carbon is demonised, as in why do you think you can have an opinion on climate science? Got any opinions on Einsteinian frame shift? How about the Higgs Boson? Why not write a letter to CERN and get a couple of Terrabytes of raw data and analyse it yourself? I’m sure that would be really productive.
Futher, ‘carbon’ is not demonised, it’s abbreviated. As a man of science you would well know that there are many gases and variables (aerosols among them); Co2 is the most obvious, and the most reported in the media. They’ve abbreviated that to simple carbon. There are a couple of carbon compounds on the list, so it doesn’t seem that unreasonable to me.
And yes, I am ignoring something; the bleeting of those opposed to change, and those who think the Heartland Institute produces good science. Why not trust that this problem, like a lot of others, has the smarter minds on it. I have never heard a good reason to doubt the motives of climate scientists, and will continue to follow their recommendations, which are pretty simple. Pollute less. It makes sense on so many levels. Why fight it?